Selling a company is a much more complex process than any other sale, as a company is a living process and its sale affects third parties: Employees, clients, suppliers, banks, tax authorities, etc.
At the same time, it also implies legal responsibilities that may have important economic consequences for the different parties. For this reason, I recommend you to surround yourself with professional advisors.
During the sale of a large business, both the buyer and the seller always rely on professional advisors to help them through the process. Even though this should also be the case with smaller companies, we still see many business owners selling their businesses by themselves without looking for support from a specialized advisor.
When a buyer interested in the company arises, the business owner decides, in many cases to deal with this potential buyer himself, without the help of a professional expert. By doing this, the process can become extremely lengthy and the negotiations may get “tied up”. Who is going to know my company better than me? By this argument, the business owner justifies the reason behind managing the sale himself.
The buyer, on the other hand, uses advisors with a lot of experience both in the finance world and in negotiation and with a strong focus on the market. The seller is at a clear disadvantage because he does not possess this experience and this is reflected in the deal´s outcome.
Your advisors can provide imaginative solutions at times were the negotiation seems to be going nowhere. By providing financial solutions, they can use this to arrive at an optimum price for the company during the negotiation.
*1* Good Advisors are expert negotiators when it comes to the buying and selling of businesses, they know how to frame the negotiation and are able to guide the client by advising him about what should be the convenient thing to say during the negotiation. *2*
A good team of advisors stops the client from making many errors, increases the possibilities of selling the company and manages to attain a much higher price for the client´s business.
Selling a company is not an easy job, and it requires a lot of time. During the period of searching for investors and negotiations, you should focus your efforts on improving the company´s financial results while at the same time monitoring the advisors and demanding to be informed at any step.
Without advisors, it is very difficult to maintain confidentiality and, at the same time conduct a rigorous search to find the best buyer or investor for your business.
Surround yourself with the best. This process will be one of the “moments of truth” in your professional life. Don’t skimp on the quality of your advisors. As I have, I imagine that you too have also come to realize that “cheap is expensive”.
Written by Enrique Quemada, president of ONEtoONE Corporate Finance.